Eternia.com

Unwrapping a gift card may be all it takes to rob you of your good senses and send you into the middle of the day-after-Christmas shopping frenzy.

But you might want to take along some cash.

It’s possible someone pilfered the balance from your gift card while it was sitting safely under your Christmas tree.

Thieves have figured out you don’t need the card — just a few numbers off the back — to cash it in on the Internet.

It is a little-known problem — some thought merely an urban legend — that has been around for years. Little-known, that is, until several chapters of the Better Business Bureau recently issued alerts.

The scam is quite real and here is how it works…

Crooks grab one or more gift cards from a display in the checkout line or elsewhere in a store. They jot down the numbers from the back of the card, then put it back. After waiting a few days for the card to be purchased and loaded with cash, they call the card provider or go online to check for a balance.

If the card is indeed activated, the bad guys can easily go shopping online and spend the money, armed with only the number.

Many retailers, such as Wal-Mart, Sears and Home Depot, have taken steps to prevent such thefts, either using a scratch-off covering to hide the numbers or placing the cards in protective packaging, said Paul Cogswell of Stored Value Systems, a Brentwood, Tenn., company that produces about half of the nation’s gift cards.

But other big retail chains offer no protection, based on a visit to stores by the Orlando Sentinel. At Target and J.C. Penney, for example, the card numbers are clearly visible.

The Sentinel was able to use gift cards bought from both stores to make online purchases without valid identification. And though a shipping address is needed for delivery of the goods, that doesn’t mean the crooks will be easily caught, law-enforcement officials said.

“Quite often, people who are committing these types of offenses use some type of temporary address,” said Lt. Dennis Lemma, spokesman for the Seminole County Sheriff’s Office.

And especially during the holidays, there may be several weeks between the time the crime is committed and the victim realizes it, increasing the difficulty of catching the crooks, he said.

Gift cards are big business for retailers. The National Retail Federation expects almost $25 billion in sales this holiday season.

“Gift cards are the goose that laid the golden egg,” said Britt Beemer of America’s Research Group in Charleston, S.C. The scam is a problem “that retailers must correct immediately,” he said.

Some retailers, however, may have resisted adding safety features because they don’t think thefts are a big enough problem or because of the expense involved, said retail-federation spokesman Scott Krugman.

“It’s costly for a retailer to change their gift-card program,” he said.

How much is being scammed is difficult to quantify. Retailers are reluctant to talk about thefts and the steps they take to counter them.

Tim Lyons, spokesman for J.C. Penney, said the retailer has not experienced many losses from the scam.

“I know that it has happened,” he said, “but it is extremely rare.”

Source: Orlando Sentinel

Filed under: Security